Up Next: Highlight (Or Something) To Crush Craigslist

Twas just a week ago that the NY Times argued that Craigslist was virtually bulletproof. Not because it’s anything special, but because they cultivate a false image of doing good while simultaneously bullying competitors with their lawyers:

So why hasn’t anyone managed to unseat Craigslist, a site that has barely changed in close to two decades?

It has dug an effective moat by cultivating an exaggerated image of “doing good” that keeps its customers loyal, while behind the scenes, it bullies any rivals that come near and it stifles innovation.

They retreat all the way on why Craigslist is successful. Nothing mentioned about legal bullying or accusations of exaggerating their image of doing good. Here’s what they say now:

Craigslist appeals to people all around the country, and world, because of its simplicity and accessibility

So, ok. That’s not what the other NY Times guy said. But let’s move on.

So Craigslist is now somewhat appealing to users, and may have some attraction beyond legal bullying and image propaganda.

But it’s not gonna last. Because in a meandering argument the NY Times says that social stuff, and mobile stuff, and/or a “distributed network” of such stuff, may “soon…be giving Craigslist a run for its money.”

Ok.

So first off they talk about Highlight as a threat to Craigslist. Highlight is a wonderful mobile social network and we’re investors. But it’s not what’s going to bring down Craigslist.

The writer, and I’m not kidding, saw someone trying to sell something on Highlight, and decided it’s a threat. “A few days ago an incoming alert caught my eye,” she says.

And that was that. Because oh my gosh, for the first time ever there’s something competing with Craigslist. Nevermind doing a web search, to the presses!

Facebook has tried. Microsoft has tried. Ebay has tried (when’s the last time you rushed on over to Kijiji?). Dozens of startups have tried.

They’ve all failed. Or are in the process of trying to figure out a way to survive in a Craigslist world.

It’s not that Craigslist can’t be beaten. But they’ve put up a pretty good barrier to entry – a simple service that charges way less than they could for what they offer. All the demand is there, and no one wants to bother listing stuff on services that have no eyeballs.

Craigslist can eventually be disrupted, and perhaps it will. But almost certainly not by any of the services listed in the NY Times article.

But what I’m most annoyed with: I don’t understand why the NY Times wants so badly for Craigslist to be beaten.

Do they really have no sense of history or the other attempts that have been made to take market share from Craigslist? Do they really think that for the first time ever someone’s trying to take them down?

It’s sloppy, naive reporting built on a foundation of questionable motive, and I don’t like it. At some point shame needs to overcome arrogance and condescension. I thought we hit that point last week, but obviously not.

craigslist is garbage especially the personals. So many fake ads and pic collectors and when you try expose on Craigslist themeselve they block you. Craigslist is trash for trashy people the personals..

It’s pretty easy to understand why the NY Times has it in for Craigslist: because Craigslist was the chief mover in killing the traditional newspaper classifieds business–and, in turn, the traditional newspaper business, since classifeds, pre-Craigslist, accounted for the bulk of newspaper revenue and profit. That easy money is mostly gone now, and newspaper people are just a tad bitter about it. It’s hard to compete with free, and the Times and other papers waited way too long to try. Result: newspaper armageddon. It’s Clayton Christensen Innovators’ Dilemma 101. And Craigslist is a handier villain than admitting newspaper management incompetence.

The longevity of craigslist is solely the only reason it will be hard to disrupt. Craigslist has survived Web 1.0 and looks like it’s going to survive Web 2.0. It was the first successful site of it’s kind and thus throughout the years we have been conditioned to use it, all the while accepting it’s shortcomings. For example, when people think of selling something online, two names pop into their minds: Craigslist or eBay. That’s an advantage that cannot be taken away and can only be cultivated in the minds of internet users throughout time.

AirBnB has tried too. They picked a sub sub category of Craigslist and turned it into a much bigger business than all of Craigslist combined. It’s possible. The NYT might, like many other news organizations, hold a grudge against Craigslist because it “brought down their local classifieds” cash cow business. And given that PadMapper, a listings aggregator, seems to be the object of Craigslist’s attack, it appears like an interesting situation of my enemy of my enemy is my friend. Because if there’s something else that news organizations despise it’s content aggregators.

Not saying AirBnB hasn’t had a measure of success, but how are you quantifying the statement “much bigger business than all of Craigslist combined”? Money changes hands via AirBnB, so all of their revenues are trackable. CL is peer-to-peer, and makes revenue off of fees (from what I hear, quite a bit of money).

So, who is more profitable? I don’t know. Who generates the most commerce? My bet is on Craigslist.

Craigslist is already getting beaten in slices, by websites offering a better experience in specific categories.

For example, Stubhub and Viagogo have sliced off the lion’s share of the events/tickets category; others are attempting the same in the Rentals category; and so on. Airbnb, Uber, and Postmates created entirely new categories of their own; they’ve seized slices of the future that Craigslist could have created if Craigslist had any vision.

Thumbtack is a major contenter in the category of local services, i.e. plumbers, tutors, translators, photographers, carpenters, etc. They already have more merchants listed than Craigslist in almost every city in America.

Disclaimer: I’m an investor in Viagogo, Thumbtack, and Airbnb. I think category-specific Craigslist-killers are a good investment opportunity as a whole.

good post mike. right now, i think it is still nearly impossible to beat craigslist head on. So many people think they will beat Craigslist because CL has kept things so simple and not innovated on their product, but the truth is that simplicity leads to a reliable service that they can provide at an insanely low cost structure… and it might not be pretty, but it works in connecting people, and that is 99% of the value created right there. Their low cost structure means they are able to create a lot of financial value for themselves and still give back to the world almost all of the value they actually create. Even though they may generate over a hundred million in earnings, relative to how much value they create, they are effectively free for the world. So in a nutshell they have massive scale and network effect, tiny cost structure, simple product, and are effectively free. For someone to change people’s behavior and get them to use something else, it it’d have to be insanely better, like 10 times better, to overcome all of that. It’d have to be some tectonic shift that catches CL off guard. Craig and Jim are pretty smart guys though, so I’m not holding my breath. Alternative services may pick off some business here and there from CL, and even grow those sectors better than CL could, but I don’t think CL is going anywhere anytime soon. (But that’s ok, in fact that’s good.)

You’re overlooking the core reasons why a NY Times editorial writer — and SO many more of us — are so strongly rooting for Craiglist to get disrupted:
– They’re bullies, suing sites that hugely enhanced rather than substituted for CL listings.
– The service has critical mass, but HORRIFIC quality. The time I spent apartment hunting on CL was godawful miserable. Every day, I cursed CL… the insane abundance of spam on the service, the pathetically minimalist filter options, and so on. But given network effects, I had to use CL because that’s where the listings were. Since (outside of NY) there was no fee and no other barriers to apartment owners listing (and re-listing and re-titling and re-listing again) and no reasonable way for me to killfile any specific apartment complexes, my apartment hunting on CL was 42x more miserable and inefficient than it needed to be.
– Other sections don’t seem to fare much better. While it’s apparently possible to score some nice deals (as a buyer or seller), the complete lack of any reputation system makes buying/selling anything of value rather dicey (at least without a costly escrow service). And the lack of any structured metadata makes finding stuff often impossibly painful.
– Online Personals?! HA HA HA HA HA HA!!!!!!!!!! Unless you’re looking for an escort or someone who can barely turn on their computer (or both).

In other words, regardless of the kind (and I think sincere) demeanor of the CL founder, Craigslist sucks. Really hard. And it’s a travesty that it’s surviving probably nearly 100% on the merits of its traffic rather on any innovation (in the last decade) or quality control.

Agree that Craigslist has some serious issues around security and spam.

However, I think it’s survival has also had a lot to do with the fact that most of us get that Craigslist is a trustworthy service (from a brand relationship perspective). Yes, a small team of people make a decent living off the high levels of traffic, but they aren’t trying to suck the life out of their users to get rich, feed voracious advertisers, investors or banks. Craigslist puts the users first. They don’t try to spy on me, sell my personal info, or drain my wallet.

I also disagree with the “bully” label. This is a private company that built an incredible community. They have every right to block other for-profit companies that attempt to exploit their success to make money.

I’m surprised so little of the recent ‘Craiglist is a spoiler’ coverage has mentioned: Craigslist still in a lawsuit with eBay, a well-funded take-no-prisoners competitor who Craigslist has alleged used a prior board seat and secret Craigslist information to unfairly compete. That is, if I’m intepreting this properly:

Being in such a lawsuit could make a company paranoid. It could make them reluctant to change — or even discuss changes to — longstanding policies (in public or in internal discoverable communications). They might even see eBay as the puppetmaster behind these other efforts. (I have no reason to believe eBay is… but any precedent set by, and allowance made for, PadMapper/3taps could also be wind up helping eBay to embrace, extend, and extinguish Craigslist’s leading role… even if it requires eBay buying up any tiny upstart that cracks Craigslist’s shell.)

Anytime we see “Craigslist plays tough with [tiny competitor]”, let’s try reading it instead as “Craigslist plays tough with potential eBay stalking-horse”… and we might be closer to understanding Craigslist’s real fears.

You write, ” I don’t understand why the NY Times wants so badly for Craigslist to be beaten.”

Isn’t it obvious? Craigslist has crushed one of the their cash cows. Classified revenue has gone down the tubes at the NYTimes, and I’m sure that they (and plenty of other newspapers/media companies) would love nothing more for them to fail. Call it professional schadenfreude … or maybe they think that if Craigslist fails, they’d have a shot at revenue redemption.

Anyway, instead of writing about mixed opinions about the next Yardsale, Zaarly or Highlight, perhaps they’d be better off creating something competitive instead. But I digress.

Craigslist killed the newspaper industry, including the Times. Before Craigslist, you had to buy a classified ad in the newspaper, and that was the most profitable advertising they had. Craigslist killed that. And thus they killed the papers.

I do not think that it makes to compete with craigslist head one. There has to be niche which would be carved out of craigslist for eg used car buying and selling, room rentals(Air BNB), classes etc, local buying and selling(zaarly)
Highlight is no way going to be any where close to challenge craigslist.

When people post listings on craigslist.org, the data instantly becomes property of Craigslist. Since this is the biggest classified listing database in the world, no doubt there’s thousands of eager startups that want to leverage the data to superpower their sleek website/mobile app with the killer database.

But Craigslist more or less operates as a non-profit and has opted to not innovate on design. You think this is frustrating as a user? Well, talk to eBay who owns a minority interest in Craigslist… they thought they were buying a percentage share in 1 of the top 10 websites in the USA. Well, maybe in traffic, but not in earnings since Craig Newmark/Buckmaster have opted to forego almost all monetization. Sucks for eBay!

A slight digression, the content on this website is frickin off-the-hook awesome. However, the shitty wordpress design is garbage. I think I’ll do a service to the real potential audience out there and start scraping this content and re-publishing on another site. Actually, I think i’ll start doing that with pandodaily, techcrunch, and the NY Times.

What? Arrington you are upset about me republishing every single word of your thoughts on my website? Why? You’re too lazy to create good design… I can do it. The people have spoken and they love my website.

Oh? You’re a lawyer and you’re suing my ass for stolen property (or some other weird “law” on the books protecting your copyright or IP)!? Why dawg? Don’t be such a hater.

Am I frustrated that Craigslist hasn’t innovated on design? Of course! Is it my place to force them to innovate by scraping their website and breaking copyright law? No. Is it ok for a fictitious person named Zuckerman to steal the source code for a bogus website named AssociateU and then use this source code as the backbone for a competitive website? Hell no.

We are entrepreneurs. As passionate as we are about great web design and WOWing our customers, shouldn’t we be that much more passionate about defending other pirates’ (entrepreneurs’) IP?

Sorry for the long-winded reply. didn’t realize i was this passionate about the craigslist/padmapper situation which I believe is misunderstood by most of our contemporaries.

“I don’t understand why the NY Times wants so badly for Craigslist to be beaten” Maybe it has something to do with the fact that Craigslist has decimated the newspaper industry by severely hampering one of their main revenue sources, classifieds.

Scott, they don’t need a valid reason to write/vilify anyone or any company in IT, anytime… because they are totally clueless, they do it because that way they look “cool” and “connected” — they have to produce content no matter what…
A simple example: Michael Arrington, a well-known successful entrepreneur in SV, now a VC [not kissing up!] If he decides to wear a large not-so-clean green shirt for three days in a row… we will likely read in the NYT a piece on deep psychological flaws that affect wealthy, successful entrepreneurs!
I am constantly reading, and if I come across a piece in the NYT or Washington Post, etc., that seems odd, I immediately check the author’s name: if I know that person or know who they are and what they are about… most of the time I skip it… not worth my time.

“… At some point shame needs to overcome arrogance and condescension …”
Mike, if you are talking about the slime that populates the NY Times’ offices… It will never happen. I have to say that I truly admire your sense of hope [naivete?] particularly when you write about that scumbag Bilton…
In a religious sense, I know that we should believe that all creatures, including “journalists” are deserving of redemption — I’m just not there, yet.

One factor that may be insufficiently thought through in these familiar complaints against Craigslist is the non-trivial triumph of the site in terms of usability for the purposes it serves. Yes, you can easily imagine many things it could do, but doesn’t. But look at what it does: Lots of viewers for postings, instant posting of ads, self-editing, surviving waves of spam attacks, extremely fast loading pages, and, of course, free. It is easy to make a low traffic competitor that looks great, but running such a service at scale for costs that allow almost all of it to be free (and free of advertising as well) is rather difficult. Perhaps worth just noting that it is not all vague reputation capital and first mover advantage here.

FYI, in Canada (or at least my part of Canada – Winnipeg, Manitoba), Craigslist is a ghost town, and Kijiji has a lock on the classifieds market. I don’t recall the history – i.e.: which opened its doors here first – but Winnipegers are a funny, clique-y bunch, and for whatever reason, we’ve collectively glommed onto Kijiji.

I don’t have numbers but I “feel” like Kijiji is very popular here in Toronto as well. This is not to say that there isn’t plenty of content on Craigslist. But when talking about listing or buying things, it’s always “check both”, equally.

I wish I had the ear of a serious tech investor who was really ready to take Craigslist head-on. work all day with small business owners who want to use Craigslist for national advertising but can’t get their message out to the masses without Craigslist beating them down. They don’t want to pay a 3rd party posting company to handle ad posting (against ToS of Craigslist anyhow) and they’re not interested in fighting Craigslist to get their ads published.

Shawn , at a high level these seem to do the job , but if you dig through cl ignoring the traction it has for it being the successful site , there are other fundamental flaws , it is a mix of next generation user interface , usability, simplicity coupled with the security etc.. will sure attract the new users . but the catch is how to get to these new users ? Significant amount of advertising dollars is required to penetrate a single local market and go from there .. piggy backing on cl – yes but at risk of user account being blocked for posting in multiple categories , etc..

I am also interested to know if any of the angels here are interested to see a POC that I am putting together based on the experience of a web startup ( still morphing ) and iterating .. Lack of advertising $$ is one big hurdle for a startup which iam seeing all the time.

Product/ site can be good , people love it , they will use it, , but to get to the critical mass that it will need to generate traction in a ripple effect manner , you still need advertising $$ to get the name of your site out . This is particularly the case for local markets where in your ad campaigns should not exclude traditional media ( news papers, tv , billboards ) to reach out to that regular user .

Again shoot me an email if you want to provide me feedback and share your thoughts on the POC ..